ANN ARBOR—Professor Emeritus Paul W. McCracken, a man who helped shape both U.S. economic policy in Washington, D.C., and the minds of business students at the University of Michigan, passed away Aug. 3, 2012, in Ann Arbor at the age of 96.

McCracken served as adviser in various capacities to several U.S. presidents, in addition to teaching. But his most prominent role came as chairman of the Council of Economic Advisers for President Richard Nixon.

“During the most difficult hours of my first term…I came to depend on Paul both for his incisive intellect and his hard-headed pragmatism. He was a key adviser during a crucial time in our nation’s history,” the former president wrote in 1985.

At the Ross School of Business, McCracken was the Edmund Ezra Day Distinguished University Professor (Emeritus) of Business Administration, Economics, and Public Policy, and kept regular hours at the school well after retiring. Until recently he was a fixture in the school’s common area, the Davidson Winter Garden, where he conversed with students and faculty.

“Professor McCracken was a national treasure, and we were fortunate to have him at Ross for so many years,” said Alison Davis-Blake, Edward J. Frey Dean and Stephen M. Ross Professor of Business. “We’re deeply saddened by his passing. Not only was he an excellent scholar, he was a worldly adviser who shared his wisdom with presidents in the White House and with students and colleagues in the Winter Garden. I loved seeing Paul frequent our building, long past his ‘retirement.’ He set a wonderful example for our current faculty and students, and is a testament to the enduring legacy of education.”

McCracken is survived by daughters Linda Langer and Paula McCracken. He was predeceased by his wife, Ruth (nee Siler).

A native of Iowa, McCracken first arrived on campus in 1948, having earned a bachelor’s degree from William Penn College (now William Penn University), and his master’s and doctoral degrees from Harvard University. He had been an economist and director of research for the Federal Reserve Bank of Minneapolis and, unusual for a business professor, briefly taught English at Berea College in Kentucky.

“I always joked that he was a closeted English professor at heart,” said Herb Hildebrandt, professor emeritus of business administration and professor emeritus of communication studies.

The two began a 54-year professional relationship and friendship over a hearty debate about the use of metaphors in political speeches.

McCracken described his economic philosophy as “Friedmanesque,” after noted economist Milton Friedman. His economic and policy acumen was recognized by leaders of both political parties, and he served as an adviser in various capacities for Presidents John Kennedy, Lyndon Johnson, Nixon and Gerald Ford, a U-M alumnus.

Friedman noted in 1985, “Paul McCracken has earned a deservedly high reputation in three different worlds: the academic, the governmental and the business…Few academics have achieved so wide a range of influence.”

McCracken was a member of the task force reporting to President Kennedy on the domestic economic situation and the balance of payments. He then was a member of President Johnson’s Commission on Budget Concepts.

Nixon, after being elected president in 1968, tapped McCracken to be his chief economic adviser. McCracken recalled the exchange in a 2011 interview:

“After Nixon won the election, the press started guessing who was going to get what job, and my name was mentioned as chairman of the Council of Economic Advisers,” he said. “A guy with the Washington Post and I had become pretty well acquainted, and he called me up and said, ‘I hear your name mentioned frequently. Is it real?’ I said, ‘I have no idea. The president-elect hasn’t yet talked to me, so I guess it’s just fluff.’

“Literally the next day I had a telephone call from Nixon, the thrust of which was, ‘Can you come to New York?’ He was set up there at the time. When he asked me to take the job, I said I ought to at least take time to get home and talk to my wife about this. Nixon and I talked a while longer and he said, ‘You know, I have a press conference coming up in about 20 minutes, and I don’t have anything to tell them. Why don’t we just announce it?’ What are you doing to do? So I said, ‘Well, okay. I guess my wife can find out about it on the news.'”

McCracken’s challenge as chairman of the Council was to encourage policies that would ward off inflation, the chief concern at the time, while not increasing unemployment. According to the Nixon Presidential Library and Museum, McCracken “displayed pragmatism and moderation, often characterized as gradualism.”

Nixon and McCracken eventually disagreed over the issue of wage and price controls, a tool some argued could help fight inflation. McCracken didn’t hold that view, and Nixon had his own reservations, but the president eventually enacted them. McCracken recalled the controversy:

“I thought price controls were a bad idea for a very simple reason. You couldn’t look back into history and point to a success story,” he said. “At the time, the president and Congress were involved in a battle in the political domain. Political battles are often more important to them than hard, solid data.”

McCracken resigned from the Council of Economic Advisers in late 1971. He did enjoy a lighthearted experience during that time, as he was depicted in a Doonesbury cartoon, a copy of which he kept in his U-M office.

McCracken’s time in the Nixon administration was recalled fondly by another former president, George H.W. Bush, who was ambassador to the United Nations and chairman of the Republican National Committee at the time.

“I often think back to the days when you and I were both laboring away in Washington, D.C.,” Bush said in a goodwill message for McCracken’s 90th birthday in 2005. “I continue to have only the greatest admiration and respect for you. Some good things do happen to politicians in Washington, and one of the good things that I treasure was getting to know you and, to some degree, watch you in action.”

McCracken continued to teach at U-M, write papers and articles—including more than 70 for the Wall Street Journal—lecture and influence policy in many ways. He was a senior consultant to Nixon’s and Ford’s treasury secretary, William E. Simon, in 1974-75, and was chairman of the International Committee of Economists commissioned by the OECD in Paris. He also chaired the Academic Advisory Board for the American Enterprise Institute for Public Policy Research.

McCracken said that his experiences in Washington had a major impact on his teachings and research at Michigan.

“There is merit in being able to bring to class true-to-life stories on the complicated process of running a government, especially on its economic policy,” he wrote in recollections to his U-M colleague Hildebrandt. “To cast a stone is easy, but when one is involved in the process, it is easy to discern that application of economic theory is a highly complex matter, rarely deeply understood by the casual newspaper writer. Giving to classes the pragmatic and political nuances, both playing out simultaneously, was for me both invigorating and stimulating—or so I thought in discussions in the classroom.”

McCracken was awarded eight honorary degrees and gave more than 300 speeches. His research and commentary topics included monetary policy, international trade, budgets and economic strategy.

His influence was global, as his interests turned in his later years toward international economic issues and he was president of the Assembly on U.S.-Japanese Economic policy. Yet Hildebrandt says McCracken would be the last to trumpet his own accomplishments.

“Paul lived a life of ethical elegance,” he said “He stubbornly believed that a fitting coda to one’s life should be that ethics and morality should walk hand in hand with whatever one does. He taught me many things, but most importantly, he taught me humility.”

Before his own death, President Ford summed up McCracken’s career on the professor’s 90th birthday:

“You and your family should be extremely proud of your many accomplishments and outstanding contributions to our great nation and the University of Michigan, which have been the beneficiaries of your unselfish, dedicated, and patriotic service,” Ford wrote in a letter. “Writing to you brings back many fond memories of our fine association.”

Related Links:

• Ross School of Business: www.bus.umich.edu